Tennessee's economy has been among the fastest growing in the United States over the past decade plus. With a temperate climate, beautiful scenery, and low taxes, Americans have been relocated to the Volunteer State by the thousands.
Across the state, though, there are an estimated 862,000 student loan borrowers that owe an average of over $36,000 each, for a total statewide student debt burden of over $31 billion.
But these students are not without hope, even in the wake of the Supreme Court striking down President Biden's student loan cancellation plan.
Today, I'm back with a guide for those looking to earn student loan forgiveness in Tennessee.
Tennessee student loan forgiveness
Student loan borrowers in Tennessee have a number of state-sponsored options for forgiveness, offered by the Tennessee Higher Education Commission & Student Assistance Corporation (TSAC) and other organizations.
Three such programs to start with are:
Minority Teaching Fellows Program
Graduate Nursing Loan Forgiveness
Tennessee State Loan Repayment Program
1. Minority Teaching Fellows Program
Tennessee's Minority Teaching Fellows Program was introduced as a way to attract talented minority Tennesseans to become educators. Program participants are eligible to earn up to $5,000 for each year that they participate, up to a maximum of four years.
In exchange for accepting the $5,000 each year, teachers will need to sign a promissory note and agree to teach PreK to Grade 12 for a year in a Tennessee public school.
To be eligible to join the Minority Teaching Fellows Program, you'll need to be/have:
A United States citizen and minority resident of Tennessee
A junior, senior, or graduate student in college
A full-time undergraduate student or part-time graduate student working towards teacher certification
A minimum 2.50 grade point average
Applications can be accessed through the TSAC portal.
2. Graduate Nursing Loan Forgiveness
The Graduate Nursing Loan Forgiveness program is intended to incentivize registered nurses across Tennessee to join nursing education programs across the state as teachers and administrators.
Successful applicants will:
Be citizens of the United States and residents of Tennessee
Have unrestricted nursing licenses
Be students in a master's degree program or post master's degree in a nursing program at an approved school or university
You can earn up to $7,000 a year in loan forgiveness if you're a full-time student, for up to 4 consecutive years (or for the length of your program if less), while part-time students are eligible for half of this amount.
3. Tennessee State Loan Repayment Program
Tennessee's State Loan Repayment Assistance Program, known as TSLRP, is open to primary care practitioners in the state that are willing and able to make a 2-year service obligation to work within a federally designated Health Professional Shortage Area (HPSA).
More specifically, PCPs will need to work at:
An ambulatory public site
Non-profit site
Private non-profit site
In addition to PCP's, other professions qualify, including:
Dentists - DDS and DMD
Advanced practice nurses (NP and APRN)
Physician assistants
Registered nurses
Mental/Behavioral health specialists
Pharmacists
An initial 2-year contract can earn you up to $50,000 in student loan forgiveness, but you may also be able to extend your contract for additional year(s) at $20,000 each year as long as you have outstanding student debt.
Federal forgiveness for Tennessee residents
Residents of The Volunteer State may also partake in any of the federal programs offered by the Department of Education. The four most common are:
Perkins Loan Cancellation
Teacher Loan Forgiveness
4. Income-Driven Repayment
Income-Driven Repayment is one of the most popular federal forgiveness programs out there, since eligibility is based on your federal loan types, rather than your career choice or service-based requirements.
This said, your payments under IDR will be calculated using your monthly discretionary income, from which you'll pay 10-20% of this amount for 20-25 years, after which your loans will be forgiven.
At this time, borrowers nationwide may opt for one of the four IDR plans, though changes are in progress:
Income Contingent Repayment
Just this week, the Department of Education formally launched the new SAVE plan as a successor to the REPAYE plan, which could lower your repayment term and will lower the discretionary income threshold to 5%. Over the next year plus, the other IDR plans are also set to be phased out in favor of SAVE.
5. Public Service Loan Forgiveness (PSLF)
PSLF takes the notion of IDR one step further. Those that work for a federal, state, local, or tribal government or a non-profit and join one of the IDR plans above may be able to have 100% of their federal loans forgiven after just 120 qualifying payments (as little as ten years).
These payments do not need to be consecutive, but they need to be made while working full-time for an eligible employer.
You'll also need to:
Have Federal Direct loans (or consolidate via a Direct Consolidation loan)
Use the PSLF Help Tool to help you prepare an application
You can even use the help tool to help verify whether your Tennessee employer qualifies.
6. Perkins Loan Cancellation
Though Perkins Loans stopped being disbursed back in 2017, there are still tens of thousands of borrowers holding these loans nationwide. Luckily for these borrowers, the Department of Education has kept the Perkins Loan Cancellation program in place.
This program can eliminate 100% of your Perkins Loans over a period of five years, according to the following schedule:
15% after the first and second year
20% after the third and fourth year
30% after the fifth year
Eligibility is similar to that of PSLF in that you'll need to work in a qualifying public-service role, such as:
Public defenders
Speech pathologists
Firefighters
Military members
Plenty of others
7. Teacher Loan Forgiveness
The final federal program for borrowers in Tennessee to consider is the Teacher Loan Forgiveness program. Open to fully certified teachers that have completed at least five complete and consecutive academic years, you may be eligible for up to $17,500 in loan repayment assistance.
That amount is open to those teaching special education or a STEM subject, while other educators may be able to earn up to $5,000.
You can browse a full list of program specifics and eligibility requirements through the Department of Education.
Other student loan forgiveness in Tennessee
Borrowers in The Volunteer State and across the country have other options when it comes to earning some student loan forgiveness, in the form of other programs that aren't sponsored or offered by any federal or state governments, but agencies and organizations instead.
8. NHSC LRP
9. Nurse Corps
There are a plethora of companies offering employer student loan repayment assistance as well!
Is Tennessee student loan forgiveness taxable?
In some states across the country, borrowers need to plan for a tax burden at the state level if they receive forgiveness on some or all of their student loans.
It is most common for this forgiveness to be treated as taxable income in the year that it is granted, but this will not be a factor in Tennessee, since the state has no income tax.
Borrowers on income-driven repayment in Tennessee should still monitor the federal tax landscape, however. While IDR forgiveness is currently tax-free federally, this law is set to expire at the end of 2025. So, without any Congressional action or extension, it is possible that IDR forgiveness could be taxed (and treated as taxable income) in the not-so-distant future.
Conclusion
While the Supreme Court's rejection of President Biden's student loan cancellation plan undoubtedly made it more difficult for student loan borrowers in Tennessee to pay off their student loans, borrowers still have a number of state and federal options designed to forgive some or all of their outstanding debt.
Do any of these programs appeal to you? Why or why not?
Tell me in the comments below!
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